External Environment

House price hysteria hits the headlines

“House prices tumble” reports the Telegraph. “House prices plunge 2.5% in biggest monthly fall since 1990s’ crash” screams the Daily Mail.  Sounds like the end of the world if you are a homeowner, particularly if you have just taken out a mortgage on an over-priced property.  But is the hysteria justified?

Belt tightening puts consumer spending under pressure

A key economic indicator for business students to understand is consumer spending.  The amount that households spend on goods and services is an important driver of demand for most businesses we study, so a major change in consumer spending growth is a significant change in the economic environment.

Avoiding the risks that lead to shattered lives

I was in the tutor2u food manufacturing division (my kitchen) stirring some delicious home-made bacon broth when a piece on tonight’s Five Live news caught my attention.  It featured a representative from the Health & Safety executive discussing new legal requirements for business owners and led onto a discussion about how complying with health and safety legislation actually generates a good return on investment for a business.

Two years of pain as CBI forecast lower growth for the UK

Business students don’t really need to know the detailed reasons why the rate of economic growth varies.  However, they should appreciate the longer-term trends in GDP growth rates and understand the main implications for businesses.

So today’s news from the Confederation of British Industry would make really useful reading for any students preparing for AS & A2 business exams in May & June 2008.  The outlook for economic growth in the UK economy is worsening according to their latest forecast.

Evan Davies explains the state of the UK economy

We’re in the middle of a turbulent period in the UK and global economy, which must make it hard for students to keep on top of developments.  So step forward BBC Economics Editor Evan Davies to answer viewer questions and concerns about the UK economy.

Evan really is a good communicator on these complex topics, and this five minute video might provide a gentle, understandable update on the economy for business students who feel a little uncertain about the economics elements of their course.

Helping Business Students Understand Rising Inflation

A short two-minute news clip on consumer price inflation is a great way of updating our business students on the latest information on inflation.  I really liked this one from Sky News this week.

Profits warning signals housing market danger

Bovis. one of Britain’s leading new housebuilders, is experiencing a significant downturn in demand, which is blaming on high interest rates and the “credit crunch”.

Supporters count the cost of following a Premiership footie club

How much would you spend to be a loyal supporter of Premiership football club? New research highlights just how much it all costs.

21p extra on the National Minimum Wage

Slowly, step-by-step, the National Minimum Wage is increasing.  The latest increase of 21p per hour represents a 3.8% increase on the previous rate of £5.52. The NMW was last increased in October 2007, just six onths ago.

A good example of price elasticity of demand

A great news article about the problems faced by Hovis bread would make a useful example of price elasticity of demand for business students.

Why being bad does cost more than being good

How the monopoly, Southern Water, paid a hefty price of not looking after their customers

Businesses, large and small, face the dilemma of whether to keep quiet when things go wrong or tell it as it is.

Admit your mistake and you can pay in sales, or lower share prices, or even having to pay to clear up the mess. Perhaps you can get away with it. If you are large enough, you might be able to hide the problems somewhere or employ clever lawyers to argue it never happened.

In a monopoly environment, where the business is the only provider, customers have no choice but to buy their products from the one company. In the past, some monopolies have been able to take advantage of this situation.

Not so for Southern Water.

Is the smoking ban killing the bingo industry?

New research from Mintel suggests that the UK bingo market is really struggling with the smoking ban

I have a soft spot for bingo halls.  Back in my days as a corporate financier, I sold a chain of 30 bingo halls to a venture capitalist.  As a team, we made several visits to the bingo hall portfolio, meeting the local managers and talking to customers.  Without exception, each bingo hall was welcoming, warm and fun. That was back in the late 1990’s. Despite the National Lottery (or perhaps because of it!), the British bingo industry thrived in the early part of this decade. However, it looks like times are getting much tougher for the industry. In the hospitality industries - pubs, nightclubs, casinos, betting shops and bingo halls - it is British bingo that is suffering the most at the hands of the smoking ban.

Will income tax have to rise?

Analysis about whether the UK government will need to raise income tax

An interesting article in the Times newspaper today raises the possibility that the Chancellor will need to raise taxes by £8 billion in order to keep government spending within the target of 40% of GDP.

From soap and soup to satnav and sony

A fascinating report has just been issued by the Office of National Statistics on how the level and pattern of consumer spending has changed over the last 50 years.